How you’ll be paying for National Health Insurance – more taxes

Health Minister Aaron Motsoaledi released the new NHI policy document on Thursday, confirming that the plan is to finance the new NHI Fund through a number of new mandatory taxes.

This will include possible payroll and surcharge taxes, while NHI-specific taxes will also form a large part of the contribution, but would ultimately have to be determined by Cabinet, the minister said.

Speaking at the launch of the new policy documents, Motsoaledi indicated that a number of changes need to be made to the current National Health Insurance (NHI) before government would be able to successfully implement the system.

While the paper will be officially gazetted for public comment on Friday, an explanatory document published on Thursday outlined some of the most important aspects of the new policy.

“The White Paper lays the foundation for moving South Africa towards universal health coverage (UHC) through the implementation of National Health Insurance (NHI) and establishment of a unified health system,” the document said.

As one of the more notable parts of the transformation of the South African medical sector, the document confirmed that the the department of health has been working with the CSIR to create a unique patient identifier system.

At present, six million South Africans are currently registered under the system which will help track personal information, contributions as well as pay-outs.

Who will be paying?

Pre-payment and contribution to the NHI will be mandatory, the document confirmed.

The NHI will be established as a single-payer and single-purchaser fund responsible for the pooling of funds and the purchasing of personal health services on behalf of the entire population.

“To reduce such fragmentation and to maximise income and risk cross-subsidisation, the NHI Fund will be a single national pool of funds that will be used to purchase personal health services. The NHI will be appropriately financed to be able to actively purchase personal health services for all who are entitled to benefit.”

“The NHI Fund will be publicly administered and the administration costs will be kept to a minimum. It will leverage its monopsony (market with only one buyer) power to strategically purchase services that will benefit the entire population.”

Financing of the new NHI Fund will be taken from tax credits on medical scheme contributions, alongside mandatory payroll and surcharge taxes, with NHI-specific taxes (pre-payment taxes) all being considered, it said.

“The NHI is about money. It’s about who gets what, where. While Medical schemes pool funds for people to get access to quality healthcare but only for a few, the NHI is for all,” Motsoaledi was quoted saying at the briefing.